Thank you.
Good morning. I'm here on behalf of the Canadian Union of Public Employees. It's Canada's largest union with over 700,000 members. We deliver quality services in communities across Canada in a broad cross-section of the economy: health care, education, municipalities, libraries, universities, colleges, child care, public utilities and airlines. This is something that we're following.
Some regions of Canada have a disproportionate number of jobs that are seasonal in nature, and I just want to point out how we sometimes talk about it. It is a reflection of the economic reality of those regions and not of the workers. They are not seasonal workers; they are seasonal industries.
Employment insurance being available to workers in these seasonal industries provides a macroeconomic stabilizing effect for the regions and buffers the ups and downs of those industries.
One factor here is that the duration of EI benefits depends on the number of hours that a worker has worked but also the unemployment rate in their EI region. Over time, over the past few years, the unemployment rate in Canada has trended down, and this has meant the appearance of what is called a black hole in some of these seasonal regions, where unemployment insurance is no longer enough to fill the gap in seasonal employment. EI has offered some pilot projects starting in 2018 that offer extra weeks, but that's a band-aid solution and is not working.
Since the extra weeks pilot was introduced in 2018, the unemployment rate in the 12 targeted regions in eastern Canada dropped by nearly 3%, so it's even harder now to qualify for employment insurance, and when you do, you get far fewer weeks of entitlement. Compared to the rest of Canada, where the unemployment rate has only dropped 1%, this is really hitting these seasonal regions.
Every percentage point drop in the regional unemployment rate means two fewer weeks of EI benefits for an unemployed worker. Since 2018, we now need an extra six weeks to make up that gap. A lower unemployment rate in these regions doesn't necessarily mean that it's easier to get a job. It just means there are fewer people there looking for a job. There's a falling labour force participation rate, an aging population and lots of other reasons that this is happening.
The increased number of temporary migrant workers is starting to get to the size where it's kind of distorting this signal of the unemployment rate. Before workers come to Canada to work, they're not counted as unemployed workers; they're not counted in that labour supply. Unemployment is meant to be an indication of the supply of available workers, but those workers aren't counted. It could mean up to a percentage point or two in the difference in the unemployment rate if we did count those workers.
Another factor is the design of the EI economic regions. Some of the sub-regions most affected are lumped in with other areas that have a completely different economic profile—for example, the New Brunswick peninsula, southern Nova Scotia and parts of Quebec. Advocates in these regions have been asking for a review of EI boundaries for some time to address this fact.
We have some recommendations.
Increase the number of extra weeks in the pilot project from five to 15.
Introduce a new reason for separation in the record of employment called seasonal layoff, which streamlines the administration of these claims and makes the process fair to workers.
Another thing we could do is allow workers to try jobs and not be penalized for doing so. Currently, if a worker takes a risk on a job that is uncertain and it doesn't work out, and they quit or are fired, they lose their access to EI benefits. They're now no longer eligible, so workers might decide not to take a risk on a job because they don't know whether or not that's going to mean losing benefits.
Then, finally, review the EI boundaries to make sure that they're representative of the economic realities in the region.
Thank you.
